There is nothing wrong with a good failure, provided you protect your investors and learn a lesson. Here’s one for the books: co-brands sounded like a winner in shelter products, but one of the best credit card lenders couldn’t build a successful model with renters, and another fintech that tried to address the homeowners market abruptly closed.
If you want a co-brand model that works, think airlines, hotels, and maybe a few solid retailers. Margins in rentals and homebuying are too slim, the market is too fragmented, and while it appears promising, think twice.
Flop One: Wells Fargo/Bilt—The Renter Model
Wells Fargo put millions into this one, aligning with Bilt, a unique firm that services rental units, from the largest apartment groups to mom-and-pops renting out a room over the garage. Wells has been very aggressive in reentering the U.S. market, with a well-orchestrated suite of rewards-rich cards, ranging from the Active Cash Visa to the Autograph Journey and Reflect cards.
But the Bilt card was a bad marriage. Net revenue was upside down, where cardholders didn’t revolve as expected. Reward mongers hoarded points but restricted their purchases to rent payments. It wasn’t lovely, and you can read about it here.
Cardless, a much smaller lender, is assuming card issuance in February 2026, with a markedly different model. We still think success will be elusive.
Flop Two: Mesa /Celtic Bank—The Homeowner Model
In an abrupt site message, the firm announced: “Effective as of December 12, 2025, all Mesa Homeowners Card accounts are closed. All credit cards have been deactivated, and you are no longer able to make any new purchases or earn Mesa Points.”
Unlike Wells’ strategic, graceful exit, with alternative offerings and no knee-jerks. TechCrunch noted that the equity funding was a mere $7.2 million, so this was a relatively cheap learning experience, according to MSN News.
Why the Flop
Whether you are paying $6,000 a month for a Sutton Place apartment or a fixer-upper Craftsman home in Tampa, Florida, shelter products consume a substantial portion of the household budget. According to Fannie Mae, the debt-to-income ratio should be no more than 36% of net income.
One possibility is that people like to keep their largest expense item clear from their day-to-day expenses. In other words, harvesting rewards on rent payments or mortgage payments will consume a substantial portion of the open-to-buy, so why cloud it with other spending, especially when you do not plan to revolve?
Another possibility is that people use different cards for different types of purchases. Perhaps they use an American Express Blue Preferred card for groceries and a Chase Freedom card for everything else.
What’s Next
Top credit card lenders, such as American Express, Capital One, Chase, and Citibank, have avoided the shelter market for their cobrands. Don’t expect them to attempt to enter this market after Wells’ test. Middle-market regional lenders will likely avoid this segment, as it would involve fragmented lenders dealing with fragmented landlords.
For now, keep whipping out your Amex Delta, Chase United Airlines card, or even your Citi Home Depot card. And, if you want to know everything about co-branded credit card offers, take a look at Javelin Card Bench.
The post Trouble at Home: A Second Flop in Credit Card Rewards appeared first on PaymentsJournal.
